Rising US Debt Will Erase Millions of Jobs and Suppress Wages Through 2075
A new analysis quantifies the long-term economic drag of America's borrowing habit, projecting millions of lost jobs and suppressed wages for younger workers as debt servicing crowds out private investment.
The United States faces a projected loss of 3.6 million jobs and a 5.3 percent reduction in wages by 2075 if its current fiscal trajectory continues unchecked. These findings come from a report published yesterday by the Peter G Peterson Foundation, which analyzed the long-term labor market impacts of the nation's $39 trillion national debt.
The foundation outsourced its quantitative analysis to EY’s QUEST practice, which modeled the economic outcomes against a scenario where lawmakers stabilize the debt. The data indicates that the job market will shrink by 1.2 million positions by 2035, expanding to a cumulative loss of 2.7 million jobs by 2055.
Take-home pay will also erode over the coming decades, dropping by 0.6 percent annually by 2035 and accelerating to a 3 percent shortfall by 2055. The report warns that rising interest costs crowd out public investments and deter private capital, ultimately slowing economic growth and negatively impacting the labor market.
The sheer scale of debt servicing is already reshaping federal priorities. Recent Congressional Budget Office research shows net interest on public debt reached $857 billion for the fiscal year, equating to roughly $23.8 billion weekly.
This interest burden now exceeds the combined outlays for the Departments of Defense, Commerce, Homeland Security, and Education. It also surpasses the EPA, the Small Business Administration, and the U.S. Coronavirus Refundable Credits scheme by $20 billion.
Market leaders have increasingly flagged the fiscal path as a systemic risk. Citadel CEO Ken Griffin highlighted the issue in his 2023 shareholder letter, writing that “It is irresponsible for the U.S. government to incur a deficit of 6.4% when unemployment is hovering around 3.75%.”
JPMorgan Chase CEO Jamie Dimon has similarly warned that the borrowing habit could trigger a bond market crisis. Speaking on a podcast with Norges Bank Investment Management CEO Nicolai Tangen in April, Dimon stated: “I just think maturity should say you should deal with it as opposed to let it happen.”
The Peterson Foundation is now urging younger demographics to pressure policymakers for fiscal stabilization. The report concludes: “The growing national debt will both shrink the labor market and drive down wages, contributing to an uncertain economic future for millions of younger Americans.”
